For non-cash charitable donations valued over $5,000, a qualified appraisal is generally required by the IRS to substantiate the deduction on your tax return, and this appraisal must be obtained no earlier than 60 days before the contribution date and before the due date of your return, including extensions.
Key Aspects of Charitable Donation Appraisals:
- Qualified Appraiser:
The appraiser must have recognized credentials, experience in valuing the specific type of property, and no conflict of interest.
· Appraisal Contents:
The appraisal must thoroughly describe the donated property, its condition, the date of contribution, any restrictions on its use, the appraiser’s qualifications, the valuation method, and comparable sales if used.
· Timing:
The appraisal must be completed no earlier than 60 days before the contribution and no later than the due date of your tax return, including extensions.
· IRS Form 8283:
For non-cash donations exceeding $5,000, Form 8283 must be attached to your tax return, and the donee organization must sign Part IV of Section B, unless publicly traded securities are donated.
· Fair Market Value (FMV):
The appraisal determines the fair market value, which is the price the item would sell for on the open market.
· Documentation:
Keep all records related to the appraisal and donation.
· Deductibility of Appraisal Fees:
While appraisal fees are generally not deductible as a miscellaneous itemized deduction by the donor, depending on the donor’s tax situation, they may be deductible as a business expense in some cases.
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